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For the Yahoo! Stock Story, Content Is Key to a Happy Ending

The Yahoo! app for iOS. Source: Yahoo!

For Yahoo! (NASDAQ: YHOO  ) it isn't enough to source content from top publishers such as The Wall Street Journal, Business Insider, and The Motley Fool. CEO Marissa Mayer wants her own team of tech reporters, AllThingsD's Kara Swisher wrote over the weekend. Two of the site's tech reporters received overtures from a Yahoo! recruiter.

"The initiative is a news website, focused on technology, that is extremely social friendly and another way to drive significant traffic back to our platform," Swisher wrote, citing an email sent by the recruiter. "We have identified this endeavor as a key anchor of our media strategy and a high growth opportunity for the media organization." 

Should Yahoo! stock investors like this move? I think so. In building out its news operation, Yahoo! should reduce its dependence on search while courting more profitable organic traffic.

We've known for a while that Yahoo! isn't pleased with Bing. Microsoft's search engine doesn't deliver enough traffic. In Q3, Mayer repeated an oft-used refrain that Yahoo! and Microsoft have been "trading share" in search while Google continues to dominate that part of the market.

A broader tie-up with Mayer's former employer could come at some point. In the meantime, Yahoo! introduced "Stream Ads" to help marketers pitch their wares in context across all Yahoo! sites and mobile apps. Think of it as similar to placing an ad in a Facebook news feed.

More news (i.e., more content) means more opportunity to place "Stream Ads," and thereby more revenue. It's a smart idea, and yet another reason to believe Yahoo! stock will beat the market so long as it's Mayer steering the business.

Do you agree? Where do you see Yahoo! stock heading over the next three years? Leave a comment below to let us know where you stand.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 04, 2013, at 7:15 PM, jojopuppyfish wrote:

    I bought at $19. More and more, I see Marissa Mayer wearing an emperor's coat.

    I am leaning towards selling once alibaba goes public.

    I see Marissa doing nothing for the bottom line.

    In fact, I'm more impressed with the prospects of Alibaba than Yahoo

  • Report this Comment On November 12, 2013, at 2:57 PM, dannyboy9 wrote:

    I am not sure where things are going content-wise but as a very long time user of Yahoo I am preparing to stop using the site and I suspect many others are doing the same thing.

    Here are two reasons why:

    1. The news feed on the home page is now terrible. It only sends links related to other things I've clicked on. There is no longer any variety. Just because I click a story about Saturday Night Live or Kim Kardashian doesn't mean I need headline stories about them every day. I can't undo this. So, I no longer find any useful or interesting stories there. I've been experimenting with sites like Huff Post and Daily Beast as alternatives.

    2. They have been tweaking - or rather overhauling their email for a while. It is now virtually unusable. Really, half the time I don't even know where to type a message, how to forward something, etc. It's perfectly awful and I no longer have the time to waste trying to use it. I've been using it for almost 15 years but I think I'll be switching to Gmail.

    So, I will probably stop using Yahoo altogether, because the two things I liked it for - news and email - now both stink. I assure you others will leave, and then their content won't have many eyeballs. They are going in the wrong direction and it will catch up to them if they don't fix these issues.

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